Health insurance system blueprint released by feds

INSURANCE

Published 4:00 am, Tuesday, March 13, 2012

Fifty million people in America lack health insurance, and the law says most of them must soon be provided coverage. But how to deliver?

The Obama administration Monday finalized an ambitious blueprint for new state-based markets that will offer consumers one-stop shopping along the lines of Amazon.com.

The rule comes just two weeks before the Supreme Court takes up a challenge to the constitutionality of the law in a case brought by states. Many governors and legislators are on the sidelines awaiting the outcome, even as time is running out to act.

Starting Jan. 1, 2014, health insurance markets called exchanges must be running in every state, the linchpin of a grand plan to make health insurance accessible and affordable to those who now struggle to find and keep coverage. Individual consumers and small businesses will be able to shop online for competitively priced coverage, and many will receive government subsidies to help pay premiums.

Experts say it's anybody's guess how the national rollout will go. If a state is not ready, the law requires the federal government to step in to run its exchange. But the Obama administration's request for $800 million to operate federal exchanges has gotten a frosty reception from congressional Republicans.

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Reaction on Monday to the 640-page rule was mixed. Consumer organizations, the insurance industry and some business groups gave it favorable or neutral reviews. Republican governors panned it.

The new markets are for individuals and small businesses buying plans. Most people who now have employer health insurance will not have to make changes.

States have until Jan. 1 to obtain federal approval for their exchanges. Among the rule's key elements:

-- The state exchanges themselves will determine the number and type of health plans offered to consumers, within broad standards set by the federal government. Plans will have to comply with marketing rules to ensure they are not trying to cherry-pick the healthiest customers in the state.

-- Consumers must be able to apply online for coverage in their state exchanges.

-- Exchanges must be able to use intermediaries called "navigators" to help educate consumers and small businesses about how the new system works.